The knowledge of the level of capital costs and their influencing factors is of central importance in every financial decision-making process within insurance companies. However, determining these costs poses particular challenges for valuation practices, especially against the backdrop of current volatility in capital markets and the limited number of publicly listed insurance companies. Sven Jähnchen provides an overview of fundamental risk factors that determine the level of capital costs. Based on an empirical study of the relationship between systematic stock price risks and corporate data from 39 European insurance companies, he presents an approach that allows for the derivation of capital costs directly based on balance sheet ratios. The author thus opens up a wide range of applications in the insurance industry.